Five Ways to Create Powerful Teams

Teams are a key element of continuous improvement. A team is a group of people linked in a common purpose. This is different from a committee, in which each individual often has their own agenda. In my experience, many companies think they have teams but in fact what they have are committees.

Here are five things you can do to strengthen the teams at your company:

1. Hire for intrinsic traits

Many managers focus on technical skills when hiring new people, but it’s more important to hire people who have the traits that will let them thrive in your business culture. Traits such as hard work, flexibility, ethics, communication and teamwork are important foundations for success in team environments. Technical skills can be taught to the right person.

2. Pay well

Pay is known as a de-motivator, not an element of motivation. In other words, paying too low demotivates people, while paying very well does not motivate people. Except in cases where the work is highly repetitive, studies suggest that motivation is more likely to come from recognition, being on a great team, and providing exceptional customer experiences than from pay. Try to keep your pay scales at or slightly above the mid-point of the market, then focus on great benefits, recognition and an excellent work environment.

3. Provide clear objectives

A team is a group with a common purpose. The purpose and objectives need to be clearly defined.

4. Give autonomy

This goes beyond empowerment. Autonomy is independence to create a work environment. With clear objectives, autonomous teams can yield powerful results.

5. Focus on progress and improvement

Track progress toward goals, not just goal attainment. World-class athletes strive to get better. If your teams are goal focused, when they attain the goal, they don’t know what to do next. If they focus on progress, there is no finish line.

Have you used any of these methods to build teams in your company? What other ways have you found to create strong teams whose results are sustained over time?

© 2018 – Rick Pay – All Rights Reserved

The Silver Tsunami

According to economists, the number of people over 65 will double in the next several years and by 2020, people over age 65 will outnumber people under 20. This is the first time in recorded history that this has happened. This has important implications for companies because as the Baby Boomers age, many of them may decide not to retire. This creates a gap in the ability for Generation X and the Millennials to move up and earn higher wages.

According to Steve Scranton of Washington Trust Bank at a recent presentation on Demographics: Impacts to the Economy and your Portfolio, the late-retirement phenomenon could have some interesting results. For example, on a recent tour of a local screw machine shop, the CEO lamented that many of his operators and machine mechanics were planning to retire soon and that qualified younger workers are few and far between. He’s not sure how he’ll respond when his long-time workers retire.

However, due to the so-called Silver Tsunami, perhaps more of the “old guard” will continue to be available, if only on a part time basis. Have you thought about how your company will respond to the brain drain as the Boomers retire?

Here are three things you can do:

  1. Develop succession plans now for all levels in your organization. Start to bring new people in and train them over time to fill potential needs.
  2. Restructure your labor environment to allow job sharing and part time work. While many of the Boomers may not want to work full time, there are many who don’t want to quit working entirely. Take a look around during your next visit to Home Depot to see what I mean. Many get bored or want supplemental income, and what better way than to continue doing what they know in familiar environment, but on a more limited basis.
  3. Look for opportunities for public/private partnerships with local colleges, trade schools and other organizations to begin training programs for younger generations.

Be ready for the Silver Tsunami in your business. You don’t want to be swept away by the current.

© 2016 – Rick Pay – All Rights Reserved

Good Work Deserves Recognition…Now

Companies spend a lot of time looking for good people. Don’t ignore the ones that are already on the team…you may lose them before you know it.

An acquaintance recently resigned from their job due in part to being significantly undervalued by the company based on market salary surveys. Management had declined to give the employee a raise to what they clearly deserved because “it isn’t in the budget.”

When the person went into the CEO’s office to resign, the CEO seemed shocked. He pleaded for the person to stay, saying that it was on the board agenda to promote them to manager and give them a raise. Clearly the employee was going to leave a very big hole in the office. The CEO said that because of this person’s contribution, for the first time in seven years, he could actually focus on what he needed to do.

Leaders can hold on to valuable employees by…

1) Making fairness and an inviting work environment part of the organization’s culture

2) Recognizing top contributors more than just at annual reviews

3) Investing in good people. Budget is a matter of priority and top team members should be high on the list.

© 2015 – Rick Pay – All Rights Reserved


The ROT (return on time) is often much greater than the ROI (return on investment) when it comes to hiring and improvement initiatives. Many companies wait to start process and productivity improvement initiatives until empty positions are filled. Recently, one client delayed the start of a project until they could get a new production scheduler, which took six months. In another case, a company delayed an operations improvement initiative for almost a year while they searched for a new VP, Operations. These delays cost months or even years of lost benefit.

Hiring Takes Time

Consider this – once you decide you need a person, depending on the level of the position, you begin a search process that can take several months. The new person may need a transition period, especially if they are still at their old job. When they start work and it might take three to six months for them to get their feet on the ground and develop the internal relationships they need in order to be effective. If, heaven forbid, they turn out to be the wrong candidate, you go back to square one. The lost time could amount to months or even years.

The Cost of Doing Nothing

Waiting rarely provides the benefits that quick action can bring, yet most companies overlook the cost of doing nothing. By waiting, things continue as they are now, and solutions and improvements are delayed. This has the potential to cost hundreds of thousands or even millions of dollars in missed opportunities. For some companies, even a few weeks’ head start on the competition can mean dramatic increases in market share, growth and profitability.

Are you measuring the ROT of not taking action? Do you wait for people to be in place before you initiate action? Why not start now and let the new people merge in to the process, like a freeway on-ramp. Speed is of the essence.

© 2015 – Rick Pay – All Rights Reserved



The One Improvement Every Company Should Make NOW

Developing great people is the vital ingredient to success. Alignment, empowerment and hiring are foundational elements of developing excellent people in your organization.


One of the biggest roadblocks to getting things done is a lack of alignment between people. Having a common goal makes the difference between winning teams and dysfunctional committees. Putting a clear vision in place helps people understand not only the direction management wants them to go, but what the ultimate destination should be. People need to understand what is expected and why.

The Right Tools…

Empower people to get the job done. Give them the training and resources to accomplish the objective set out in the vision. Then let them do what needs to be done – this helps develop a culture of trust.

…in The Right Hands

Careful hiring is essential. People with specific technical capabilities are often easy to find and training is widely available. A person whose values align with the company culture is a rare gem. Questioning and testing during the interview process can determine if the person has personal characteristics that will make them successful within your company’s culture.

Alignment, empowerment and hiring are all vital to developing great people, and every company needs great people now.

© 2012 – Rick Pay – All Rights Reserved

Treat Temps as Part of the Team

Many companies today use temporary workers to supplement their workforce. This can be a very effective way to flex both up and down as customer demand changes. I currently have clients who use temps to make up from 5% to 50% of their workforce. However, many of these same clients do not recognize their temporary workers as a key part of their teams. They often don’t include them in company and team meetings, they don’t measure their performance and they won’t allow them to hold positions such as team leader.

Equal Expectations, Equal Treatment

If you use temps, which you should, you need to consider them as equals to company employees in all situations except possibly exposing them to key financial information. You rely on temps to produce quality workmanship with productivity equal to your regular employees. How can they do that when they don’t attend team meetings or are treated as second-class citizens?

I have one client that was beginning a vital change management process but wouldn’t allow temps to attend team meetings or hold leadership positions even though they had been on board for many months (some for more than a year, which is another issue) and in some cases, held roles equivalent to managers.

Investing in Temps

If you expect your temporary workers to produce results equal to your regular employees, treat them the same. Allow them to hold team leadership positions when qualified and to participate in team and company meetings so they stay informed. This will keep them excited about their potential with your company and may make their eventual hiring much easier. You never know where a vital employee will come from.

© 2011 – Rick Pay – All Rights Reserved

Is Labor a Fixed or Variable Cost?

If you talk to your local cost accountant, they will tell you that labor costs (along with materials and supplies) are recorded as variable costs.  In reality, they should be treated as fixed costs.  Why is that?  Because, in the short run, it is not easy to turn this asset into costs that can vary with revenue which is the definition of a variable cost.  It is very difficult to lay off people in a low revenue month and then rehire them in a high revenue month.  If you try to do that, hiring costs, training costs and cost of quality all increase usually to the degree that they more than offset keeping the people through the downturn.

Many companies will try to furlough people or send them home early in an attempt to turn this fixed cost into a variable cost.  While this works in the short run, people will get tired of the lower income and unpredictable work schedule and eventually will look for a new job.  This again raises the cost of hiring, training, etc.

The only true variable labor cost is the use of temps and overtime.  If your company is in a volatile market, it is best to plan for a level of temps and overtime to create a variable environment.

© 2010 – Rick Pay – All Rights Reserved